A Conceptual Analysis of the Structure of Life Insurances in  Takaful and Conventional Insurance Systems

Three decades ago, the system of Islamic Insurance-‘Takaful’ was propounded in Muslim societies and gradually made a remarkable progress, both among Muslims and others. The proposal was made because some Islamic scholars (mostly Sunnis) found the elements of “interest (Reba)”,”uncertainty (Gharar)”,”gambling (Mayser)” and “wrongful consumption of others wealth” in Conventional insurance. In case of the conventional life insurance, they pointed towards these flaws, with greater emphases, and, the Islamic Life Insurance (Family Takaful), free of the weaknesses and with a new structure, was proposed as a substitute. The products of Family Takaful have high ability to compete successfully with the products of Life Insurance. Due to its merits, for example, transparency of activities, limitations on profiteering, association of the policy-holder’s and the operator’s profits, and ethical guidelines of investment etc.; the Family Takaful has transformed into an attractive option for Muslims and Non Muslims [alike].This paper focuses on the answer to the issue that: Whether offering the Family Takaful products alongside the Life Insurance ones, will help increase the popularity of life insurance in our country or, not? To answer this query a practical and exploratory approach was used in this research and, it is concluded that: The Family Takaful products in the form of a useful tool of managing family wealth can supplement the products of Life Insurance. And by offering the Family Takaful products the increase in the popularity rates of life insurance in the country can be planned.